FAMILY ALLOWANCES.

HL Deb 05 March 1941 vol 118 cc563-93

THE LORD BISHOP OF WINCHESTER rose to move to resolve, That in the opinion of this House, the introduction of a system of family allowances, whether paid for wholly by the State or by the method of contributory insurance, would provide a means of preventing the increased cost of living from injuring those who most require protection—namely, families with dependent children. The right reverend Prelate said: My Lords, in July, 1938, I brought before this House the question of family allowances and I asked the Government then if they would agree to appoint a Committee which could consider and report on a large number of questions which arise in connection with this problem; but both in this House and in another place the Government did not find themselves able to agree to this modest proposal. The Government spokesman told us then that the matter affected the lives of many. He also stated that in the months or years to come no doubt there would be much discussion and consideration of this question, but that was not the right moment for a formal inquiry. I am sometimes inclined to think that Governments occasionally model their replies on the famous reply of the White Queen in Alice in Wonderland—" Jam yesterday, jam to-morrow, but never jam to-day." The day has not yet arisen when a Committee has been appointed to inquire into this matter which affects so vitally the lives and happiness of ten of thousands.

But of course much has taken place since the Government found themselves unable to appoint a Committee. The war has made the matter much more acute, and during the months that have passed there has been ever-increasing support for the proposal for family allowances. Really it is very remarkable, when you look back over the last few years, to notice how many different sections, how many different people, have supported this proposal. There was the Mining Commission presided over by the noble Viscount opposite (Viscount Samuel) which some fifteen years ago recommended family allowances for the mining industry. Only three years ago there was that important document presented to the Pilgrims' Trust on the unemployed. In that it was stated that the demand for some form of family allowances appeared to be irresistible. You have eminent economists like Sir William Beveridge and Mr. Keynes, you have an eminent student of social problems like Mr. Seebohm Rowntree, all supporting this proposal; you have a statesman like Mr. Amery, and behind them there is the powerful advocacy of The Times. No one can say that this is a proposal which comes from one Party alone. It is a proposal which is backed by the greatest variety of opinion.

This demand for family allowances, which has become so strong in recent years, arises very largely from the realisation of two facts, two very simple and closely-connected facts, which were not sufficiently understood in the past. The first of these facts is that poverty falls more heavily on children under the age of fifteen than on any other section of the community. Sir John Orr, in that remarkable inquiry he made into the food of the people, states that 14 per cent. of the population, but over 25 per cent. of the child population, are living on incomes of under 10s. a week. Allowing a diet costing 4s. a week, that means they are deficient in every constituent necessary for life. Fourteen per cent. of the whole population, but 25 per cent. of the child population, are living under these conditions. This statement is confirmed by a large number of independent surveys which have been carried out by universities and colleges in various great towns. All of these surveys agree in stating that it is the children who have to bear the heaviest burden of poverty. For instance, in the survey of Merseyside it was found that 24 per cent. of the children were living under conditions of primary poverty; 30 per cent. of the children of Southampton, 26 per cent. of the children of Sheffield, 21 per cent. of the children of Bristol. It is impossible to give exact numbers, but the Bristol survey said that in that prosperous, town there were no fewer than 16,000 children living under conditions of primary poverty. That is the first fact—namely, that the children suffer most from the results of poverty.

The second fact—very closely connected with it—is that this poverty is not scattered generally and widely over the whole mass of children of the country, but is very largely confined to those families in which there are three or more children and where the wage-earner is poorly paid. Here, again, all the surveys stress this point, that where you have a family of three or more, there usually you find poverty. After all, if you consider the actual situation of the ordinary wage-earner, you see that that is inevitable. A man of twenty-one or twenty-two has a wage, if he is unmarried, which is quite sufficient for himself, with a surplus over. It is not always so but very frequently it is that in case he marries there is still sufficient for himself and his wife to live on, and when the first child arrives perhaps there is sufficient also, but when the second or third or fourth child comes then the difficulty arises. Every additional child means that there is less money in the family to spend on the food and clothing of the young children. It has been said that a diagram would show two lines of the income and expenditure in a workman's family in this way: the lower line would be the line of income, and it would be generally level throughout the period of twenty or thirty years, possibly slightly rising; the line of expenditure would be very close to, slightly above or possibly slightly below; the line of income, but when the children begin to come this line bulges out and does not begin to fall until after, say, fifteen years, when the children begin to go to work.

This has always been the position for a number of years, but it has been accentuated lately by war conditions. The cost of living has gone up. It is of course perfectly true to say that in many trades the cost of living has been offset by the rise in wages, but that is not universally true. That is not true in the case of unorganised labour. Very frequently there the rise in wages has been very small, and I think it is generally agreed that it has not been comparable to the rise in the cost of living. In one sense this problem is a new problem compared with the position in the eighteenth century. In the eighteenth century there were very large families, and there was poverty, much greater than the poverty to-day, but on account of the high mortality most of the children died in infancy, and in addition the surviving children at a very early age went to work. A traveller in the north in the first quarter of the eighteenth century speaks with satisfaction about the way in which practically every child over four years of age is earning. Sir William Petty, an economist, writing rather later, says that at the age of seven every child ought to be able to support himself.

In one of the blackest and most tragic stages of our history, the beginning of the last century, during the industrial revolution, mine owners and factory owners gained great wealth through working, often to death, quite small children. All that has come to an end. Infant mortality is halved, and all sorts of restrictions have been put on child labour. Children are at school until they are fourteen or fifteen, and the result is that you have in existence the wage-earner, possibly earning only a small wage or a comparatively small wage, with a dependent family of three, four or five children. I know what will instantly be said, or at any rate thought—namely, that they ought not to have these children, that it is reckless of them when they cannot provide for the children to have these large families. I am not sure that will be said with as much confidence to-day as it would have been said two or three years ago. We recognise now that there is no great danger of our country being over-populated in the future. But whether you think it is right or not for these parents to, have so many children the fact remains that the children are there, the children are in existence to-day, and if those children are neglected they will grow up anaemic, unhealthy citizens, a burden to themselves and a burden to others, whereas if they are properly taken care of they will prove a valuable asset in the wealth of the country.

Accepting then the fact that the children are there, what is to be done to help them in their poverty? Three main suggestions are advanced. The first is that the Social Services should be extended and improved. A great deal has been done for the Social Services in recent years; I doubt if any country in the world has Social Services so strong, vigorous and extensive as our own; but there is, after all, a limit to what can be done by Social Services. Although these Services should be extended even more than they are at present, yet there comes a point when you may extend them so that they become a rival to the family and undermine the family. But whether that is so or not it will take a very long time to extend the Social Services so as to meet this particular need.

The second policy advocated is increased wages all round—increase the wages so that any man who has three or four children has no difficulty whatever in providing for them. Well, whatever other reasons may be advanced—and no doubt there are good reasons—for an increase in wages, in this particular case it is unnecessary. If wages were increased so as to meet the hardship of the children you would be providing for thousands of wives who do not exist, and for millions of children—I think 17,000,000—who are not in existence. But there is a more serious difficulty if you mix up the question of the support of these children with the question of wages. If you raise wages suddenly and universally you are creating a new danger, you are forcing up prices as well as wages. A rise in prices would follow such a sudden universal rise in wages, and you would be on the slippery slope of inflation, and those who would feel the evil results of inflation would be the poorest members of the community.

So, then, we are driven back on the third proposal, family allowances. It is the system by which children have an allowance made for them, possibly 5s. a week, paid, I think by preference, to the mother of the family who would spend the money on food and clothing and the general welfare of the children. There is nothing very startling in this proposal of family allowances. It is a common-sense way of meeting a difficulty. The first time I came into contact with this method was after I had been Bishop of Southwark for three or four years. We had a large number of assistant curates and it was brought to my notice that some of them found it impossible to live on their stipends. On making inquiries I found that all those who were in this difficulty were married men with families. It was impossible for us to raise the stipends of all the curates in the diocese, so we adopted the very simple plan of giving a man an extra £30 a year for his wife and an additional £15 for each child. There, on a tiny scale, you see what is meant by the principle of family allowances.

That principle is not unknown in this country. If a man has no work he has a family allowance. If a man is in work he has no family allowance, but if he is out of work and goes to the Public Assistance Board then at once an allowance is made for the children he has. Take the Service men. Allowances are made for their wives and their children. If you look away from this country to the Continent, you find that in several countries this system has been adopted for many years past. If you look overseas to the Dominions—to Australia, New Zealand and elsewhere—you find in various forms the system of family allowances. Of course the question quite rightly will be asked: What about the cost? Would not this cost a very large sum of money indeed? It is undeniable that if an allowance of 5s. was going to be given for every child under fifteen in this country the cost would be very high indeed. It is estimated that it might cost £116,000,000. But supposing the allowance was made only in those families where there is a third child or more than three children, then it is estimated that it would cost £24,000,000 a year; that is to say, the cost of two and a half days of the war.

The question of cost does depend almost entirely on the particular way in which this scheme is worked. That raises a very controversial question. How is the money to be found? The money could be found in one of three ways. On the Continent—I speak of the Continent before the war—in France and Belgium, I understand, and I believe it is also true of Australia, money is raised by contributions from the employers. They pay into a pool and from that pool payments art made to the employees who have large families. That is different from the individual, employer paying the men who are engaged by him. That system would be fatal unless it is done entirely on a voluntary system. Quite obviously it would mean that the employer would be inclined to get rid of the men who have large families on account of the additional cost thrown upon his business. The pool system is a different system. Or the money could be found by direct payments by the State. Of course in many directions that would be the most popular method of meeting the expense. The third line is through an extension of our present insurance methods, by which we have a contributory system, the State, the employers and the employees all making their contribution.

But I am not asking your Lordships' House to express any opinion on the details of the principle or the way in which the money should be raised. Quite clearly this can only be decided after most careful inquiries and after agreement has been reached by those who are mainly concerned. If a Bill was brought in before agreement had been reached you would find a very difficult controversy. I would not ask the Government to bring forward a Bill dealing with this matter until some preliminary agreement had been reached. I am not asking your Lordships' House to express any opinion as to the particular methods to be used in raising the money, but I am asking the House to express in principle approval of the policy of family allowances. There was a very striking phrase in the leading article in The Times yesterday: Food should be as sure a birthright in our land as freedom.

That is what the system of family allowances really attempts to express.

We have these children. It is the height of folly to ignore their existence. When the noble Lord replies for the Government, he will give, I am sure, a sympathetic, and I hope a friendly, reception to this proposal. If, however, he finds he cannot even accept it in principle, I would urge him to tell us what line the Government propose to adopt towards this matter. Are they going to do something for these children—there are hundreds of thousands of them—who are living in conditions of poverty? If not, it means throwing away a very valuable asset in the nation's wealth. If on the other hand the nation cares for them, the nation is preparing for the difficult days of the future. It is only justice to the children that they should be given a reasonable chance. I beg to move.

Moved to resolve, That in the opinion of this House, the introduction of a system of family allowances, whether paid for wholly by the State or by the method of contributory insurance, would provide a means of preventing the increased cost of living from injuring those who most require protection—namely, families with dependent children.—(The Lord Bishop of Winchester.)

VISCOUNT SAMUEL

My Lords, the case presented by the right reverend Prelate with so much cogency and in so comprehensive a manner is to my mind an overwhelming one. It is difficult to see why this reform has not been carried out long since. Now, in these days of war, it has an immediate urgency. The cost of living, owing to causes familiar to all of us, has greatly risen. It has risen by somewhere in the neighbourhood of 30 per cent. and naturally the wage-earning classes require advances in their wages to counterbalance these increased burdens. Wage scales have risen accordingly, and in the future if the cost of living rises further they will increase again. The consequence of that again, as we all know, is that the cost of production rises, affecting prices in general, again in the vicious circle affecting cost of living, affecting also the cost of our ex- ports and consequently the considerations that arise relating to the balance of trade. In every way the present system of rises in the basic wage scales following rises in the cost of living has grave economic consequences.

The present system takes into account the average family. Whether it be the normal basic wage or whether it be additions due to the increased cost of living, it is the average family that is envisaged. Where the family is larger than the average hardship is necessarily imposed, and where a family is smaller than the average then more is done to fulfil the purpose than the facts of the case require so far as increased cost of living is concerned. If we were to adopt the same principle, say, for the Army, and were to pay the whole of our soldiers the amount that would be necessary to support a wife and the average family, everyone would say that that was absurd because an immense proportion of our Army consists of young men who are unmarried, and it would be asked why should the State undertake the burden of this enormous expenditure to help to maintain people who do not in fact exist. Therefore for our soldiers, for the officers and men of all ranks in all three Services, we adopt the rational, sensible system of paying what is regarded as adequate pay—although in fact pay is not the prime element in their service, they do not serve merely for pay—for the individual, and in addition to that we pay allowances in respect of the actual families. If we were to do otherwise, our expenditure of £10,000,000 a day would be far exceeded. Similarly with regard to people who are unemployed. We do not say we will pay every unemployed workman as much as is needed to maintain the average family, whether he has one or not. We pay a basic sum plus a family allowance in respect of wife and dependents. And the consequence of this in practical application throws a very vivid light upon defects in our social system.

LORD Rushcliffe, whose official position confers upon him great authority in these matters of unemployment allowances, has told this House on a previous occasion that the effect of the present system is most anomalous, because unemployment allow- ances are paid on the basis of the existing families while wages do not in any way take into account domestic circumstances. The consequence is that an unemployed man may get as much as, or even possibly more than, he did when he was in work. It does not follow, however, that his unemployment pay is too much, but it does follow that his wage pay was too small. It is obvious that if the unemployment allowance, which is almost on a minimum basis, is the same as, or more than, the whole wage of a workman with a large family, obviously the wage of the workman with a large family is inadequate.

This question raises immediately, in war conditions, a matter of great urgency of a financial character. But it raises also, always and at all times, a great human question. We must consider the interests of these children. We know that an immense number of the children of the country arc under-nourished, that they have too little food or food of bad quality, that their health and strength are impaired, and that they are in fact crippled for life. It is no answer to say to these children who belong to large families that all is well on the average, that our present wage scales are sufficient to maintain the average family in some degree of comfort. When some five or six hungry children in a large family are sitting round a table and clamouring for more to eat, it is no answer to say that, on the average, there is a sufficiency for everyone; that in the next-door house there may be no children and the same wage going in; and that if you take the average of the whole street there is sufficient food for everyone. Mathematics and common sense are sometimes not the same thing, and average computations do not fill empty stomachs. The fact remains that there are in this country 1,250,000 children belonging to these families where there are four, five or six children—putting aside the children in families where there are three children or less—in this situation of belonging to families which have to live on the average wage but are more numerous than the average.

On the other hand there are wage-earners who are bachelors to the number of about 3,000,000 and there are, therefore, 3,000,000 wives provided for who do not exist. As the right reverend Prelate has said there are 17,000,000 children—the figure he mentioned I think was 17,000,000, but the figure I have seen was 16,000,000—who also do not exist, but for whom, on the average system, our wage scales now make provision. It is no answer to say, when pointing to the 1,250,000, that we are most generous to these others, these 3,000,000 wives and these 16,000,000 children who do not exist, who are provided for, and that therefore in the long run on the average justice is more than done. One of our most distinguished economists and administrators, Sir William Beveridge, has said, after a long survey of questions relating to the economic conditions of the people: The greatest single cause of poverty in this country is young children. Now is not that a shameful thing? What an indictment of our economic system that it should be true that the greatest single cause of the distress of the people should be the existence of young children! And what an indictment of our own logic that those parents who do their duty to the community and accept the burdens of parenthood should be penalised, while those people who shirk their duty should be rewarded and should have economic advantages.

The consequence of this is what we deserve. Nemesis is now upon us, for we find that owing to the stress and strain imposed on families, combined with the invention in modern times of methods of birth-control, there has been a catastrophic fall in the birth-rate. I brought this before your Lordships' House in June, 1939, and those of your Lordships who were present may remember a most cogent and forcible speech made by the noble Viscount, Lord Dawson of Penn. Although a. complete case was made out for serious consideration of the problem, we had from the Government a speech couched in the usual tone of complacency, and soothing statistics were presented by the Registrar-General. The House and the country took not the slightest notice of this problem which was looming in the future. We may wake up too late, and the day may come when, like Marshal Pétain on the downfall of France, we shall have to give vent to his plaint: "Too few children, too few children."

But it is not merely a matter of military strength in this age, unhappily, of conflict. Family life touches all the best in human values and if you look back in history you will see that stable family life was the basis of all the great nations in their greatest periods. Now other countries of Europe are alive to these facts. As the right reverend Prelate has said, we are lagging behind some other nations of the world. This question of family allowances has been taken up and embodied in legislation in the permanent wage systems of France and to some extent of Germany, Belgium and Holland, and we read in the Press recently that now the Government of Australia are establishing a scheme on the same lines. Here we have had little application of the principle, except for the armed forces and the unemployed. During the last war, when I was responsible for the Metropolitan Police, and when there was a strong case made out for large increases in pay because of a great increase in the cost of living, I introduced this system for the families and removed legitimate grievances of the Force, at the same time not imposing upon the public purse a charge beyond the necessities of the case. That system is still in vogue in the Metropolitan Police in the form of rental allowances given to married constables and men of other ranks. Last year we passed through Parliament a Bill making provision for persons who are receiving allowances under the Workmen's Compensation Acts, the people who have suffered accident or disability and receive week by week a sum to maintain them. There again, instead of simply by a stroke of the pen increasing the scale of allowances all round, for the first time a system of grants in respect of dependents was introduced.

Not only has this been done through public authority, but some—only a few as yet—of the most enlightened business and industrial firms in the country have done the same thing. For some years past, family allowance systems have been in operation in the enterprises of Pilkington's, the large glass manufacturers, Tootal, Broadhurst, Lee and Company, one of the most important cotton firms in this country, Messrs. Cadbury, and several others, in every case with complete success. The cost to the firm has been found to be moderate, and the system has worked with complete satisfaction both to employers and to workpeople. There is, however, this disadvantage: if you proceed individually, each firm having its own scheme, then, as was pointed out by the right reverend Prelate, there is the temptation, if not the risk, that the employer may engage unmarried workpeople or workpeople without dependents, so as to escape the duty of paying allowances for children. In the other countries where these schemes are in operation that danger is completely avoided by the establishment of pools, either for geographical areas or for industries. Every employer pays in the proper amount to the pool in proportion to his wage bill, and the State and, sometimes, the local authority also assist. From that pool is drawn the individual payment to the particular workman. There is accordingly no danger whatever that this scheme may have an effect opposite to that for which it is designed, and rather restrict the employment of the men with larger families than encourage it.

All these matters, however, require investigation, and I was deeply disappointed, when the right reverend Prelate who has spoken to us to-day brought forward this matter in July, 1938, that the Government, without reason given, refused any inquiry. If an inquiry had been undertaken at that time, then all the various alternative schemes would have been investigated before now. The opponents of the proposals would have been listened to, and their arguments either accepted or overcome by counter-arguments, and we should be to-day in a position to arrive at a final decision. Why has this not been done? Partly because people are afraid of the large figures of cost; but the cost to the community as a whole if it is not done is far greater. I venture to say that at the present moment there is an economic burden on the nation as a whole, as well as dangers in respect of inflation, many times greater than would have been incurred if a system of this kind had been created three or four years ago.

The other opposition comes from the trade unions. The trade unions, who are often exceedingly conservative-minded, have not understood all the implications of these proposals, and sometimes they may be afraid that the establishment of a family allowance system may check the increase in the standard wage. Sometimes when wage bargaining is going on the representatives of the workpeople will say: "How can a man with five or six children live on a wage such as this?", and a sort of appeal ad misericordiam is made. Possibly that argument would not be so potent if a system of family allowances was introduced, and they may be afraid of that. But wages, in the main, are not fixed upon the basis of that consideration. It is a question of economic position, of effective combination of workpeople, and many other factors enter into it, so that there is, to my mind, no reason for thinking that the standard wage would in any way be endangered if this system were introduced, especially if it were introduced avowedly as a means of meeting the increased cost of living.

The miners, on the other hand, who are highly organised, have shown a disposition to approve this plan. The Royal Commission on the Coal Industry, to which the right reverend Prelate has referred, in 1926, after reviewing all the economic conditions of the coal trade, came unanimously and very emphatically to the conclusion that the introduction of a system of family allowances would be one means of relieving what was then the very difficult position of the industry; and the mining population in the main, I believe, was converted to that view. In the main, however, the Labour Party have not yet supported this proposal, which seems strange, as they hold the Socialist creed. In this particular matter they are adopting the narrowest individualistic standpoint rather than one which considers in the first place social welfare. I hope that to-day we may perhaps receive from that quarter a more encouraging statement; and I most earnestly hope that when the noble Lord, the Leader of the House, replies for the Government to-day he will be able to signalise his advent to that honourable position by giving more satisfaction to the advocates of this reasonable scheme than we have yet had the advantage of receiving.

THE EARL OF LISTOWEL

My Lords, the raising of this question this afternoon by the right reverend Prelate emphasizes the fact—to which he rightly alluded, because it is one of considerable importance—that this has never been a purely Party issue. There are supporters and, admittedly, opponents of family allowances in every political Party. There can be no doubt, however, that war conditions, and particularly a steadily falling standard of living, have revived public interest in this particular device as a means of alleviating acute poverty, and that at the present time it has more supporters everywhere, including inside the trade unions and among individual members of the Labour Party, than it ever obtained during the more prosperous years of peace. In this connection I hope that the noble Viscount will allow me to remind him that the Trades Union Congress has not expressed any official opinion on the subject for the last ten years, and that the conditions which we are emphasizing this afternoon are conditions which have been created by the war.

The right reverend Prelate mentioned an article which appeared in The Times yesterday, and I think that this was in itself a striking piece of evidence for the increased interest in and sympathy for family allowances. I think that there can be little doubt that the influence of progressive opinion on this subject is spreading rapidly with the growth of those hardships which the civilian population must inevitably endure under a war economy. Recent events—and it is those with which we are dealing primarily—have enhanced and magnified the problem of poverty in large families. Before the war it was calculated that the poorest 10 per cent. of the population—the more exact figure is, I think, 14 per cent., the figure mentioned by the right reverend Prelate—included 25 per cent. of the nation's children, and the diet that their parents could afford for them was inadequate to maintain them in a condition conducive to normal health. That finding of Sir John Orr, I think, cannot be too often repeated. It is safe to assume that a very considerable proportion of these people belonged to large families, that is to say to families of four or more children, according to the generally accepted definition. But since then the imperative necessity for cutting down civilian consumption in order to produce the goods we need for carrying on the war has lowered the standards of every section of the community, including of course those who were already living below subsistence level when war broke out. In spite of the higher wages in many occupations and the Government's efforts to control the price of certain necessities, the cost of living has risen ap- proximately 30 per cent. since the autumn of 1939. So the social problem, to which both the previous speakers have alluded, that confronts the country at this time is how to ease the lot of those for whom the smallest additional sacrifice means privation and chronic malnutrition.

I think there are three different remedies—I shall differ on this minor point from the right reverend Prelate—that have been tried out, but none of them has brought us appreciably closer to a solution. The first of these is the attempt to raise the general wage level until it covers the normal needs of an average family consisting of a wife, a husband, and three children. But if the united efforts of the trade unions and the Labour Party during the most prosperous years that preceeded the war have failed to achieve this objective, it is obviously unattainable so long as civilian consumption continues to be reduced to a minimum by the inescapable demands of modern warfare. Besides, even if a living wage in this sense were secured—and it is a theoretical, if not a practical, possibility—the large family, which begins of course with the fourth child, will still be in want. Though it would generally be admitted that a moderate rise in wages does mitigate hardships due to the war, it should be remembered that this rise is not spread evenly over the whole wage-earning class, because the recipients are mainly concentrated in industries where trade unions are strongest and are usually employed directly or indirectly by the Government.

The right reverend Prelate, I think, referred to the many workers, artisans and manual labourers, who are occupied in comparatively unorganised forms of employment. Taking into account this fact and the increase that has taken place in wages, there is therefore a purely accidental relationship between higher earnings and family means. It has often been pointed out in this House—I think the last occasion was only a fortnight ago—that the attempt to increase wages pari passu with rising prices is bound to be fatal and self-contradictory, because higher wages mean higher costs, and higher costs are reflected in a further rise in prices. That is certainly treading the path towards inflation, even if it does not, as we devoutly hope, take us the whole way. But I venture to hope that those who have expressed themselves in favour of keeping down wages and who have criticised the Government for their policy of drift in this matter, will observe that a system of family allowances is the only effective way of protecting the lower-paid wage-earners from the steadily growing disparity between wages and prices. What appears transparently clear from this argument is that neither in peacetime nor in war-time will family poverty be removed by a general and flat increase of wage rates.

The second remedy, on which I think the right reverend Prelate rightly dwelt for some time—the second remedy that has been tried out by the Government has been the extension and improvement of existing Social Services so as to cover as far as possible those who have been hardest hit by the war. The important measures of social reform carried through Parliament in the past year have all tended in this direction—I am thinking particularly of the increase in the old age pension and the inclusion of new categories of beneficiaries. No less significant, I think, has been the abolition of the household means test from the administration of public assistance. While drawing attention to these two reforms, I cannot resist the temptation of pointing out that they have been urged from these Benches for many years past.

But the most enterprising step that will give the greatest measure of help to these large and impoverished families is the provision of free and cheap milk for mothers and infants by the Ministry of Food. It was welcome news to hear how much the consumption of milk under this scheme has increased in recent months. Less reassuring, I think, was the information given us by the Minister about the smaller quantity of milk drunk in the schools. This no doubt is due to the difficulties arising out of evacuation. And there is probably—although we have not had any definite information on this point—a corresponding decline in the number of school meals. Perhaps the noble Lord will be able to give us a reassuring reply on that matter. But for all the good that this may have done, what renders relief in kind inherently less desirable for necessitous children than cash payments to their parents is, firstly, that such relief only touches a small fraction of the population, and, secondly, that a child after all must be properly fed at home during the holidays as well as at school, and that its health depends upon other things, such as clothing and warmth during the winter, which only the parents can provide, as well as requiring an adequate diet.

The third and last method of indirect assistance for the poverty stricken family is price control. The Government are spending upwards of £100,000,000 a year on subsidies to peg down the prices of certain essential foodstuffs such as bread, milk and meat. Notwithstanding, the cost of living, as I have already mentioned, is steadily climbing, and this tendency is bound to continue so long as the retail price of any necessity escapes control. I am sure that everyone would agree that the Government could not possibly afford a sufficiently large subsidy to cover every commodity that affects the cost of living. Apart from this consideration—the very limited effect of Government subsidy—the main objection to price control is that it is a clumsy and extravagant way of alleviating hardship. At a time when everyone is being asked to reduce expenditure on personal needs, the Government are actually contributing a huge subsidy towards civilian consumption, of which nine-tenths goes into the pockets of those who can well afford to pay more for their food. I am not denying for a moment that a moderate rise in wage rates, extended Social Services, and Government control of prices have not done something to temper the wind to the shorn lamb; but these indirect methods are, at best, a short-sighted and expensive palliative, and their inadequacy will be more and more apparent as the soaring cost of modern warfare eats further into our national income.

That is why I believe we shall ultimately accept the principle already operative, as has been pointed out, in several of the Dominions and all the large Continental countries, of making cash payments to parents based on family needs. For a long time we have found this particular practice useful in a limited class of cases. Before the war both unemployment assistance and public assistance took into account, as they still do, the number of children in a destitute family, and of course the Income Tax payer has always received a rebate on his dependant chil- dren. Since the war these instances of family grants have been enormously multiplied by the addition of the children of the men serving in the Forces of the Crown. But—and this is the essential thing to remember—a far greater army of wage-earning workers in fields and factories, mines and workshops, still remain outside the boundary of social protection. If family allowances were to become nation-wide, there is no doubt, as both the previous speakers have emphasized, that the State would have to dip deeper into its pockets than it has done hitherto.

The question arises: Can we afford to spend more on our Social Services? I would give only one illustration of what would have to be spent on an extremely limited scheme. It has been calculated that an allowance of 5s. a week for the fourth and every subsequent child would cost the nation £10,000,000 a year—that is to say, for the children in large families according to the accepted definition. That is less than we are spending in a single day to carry on the war. Surely that would be a trifling sum in an annual Budget that will amount, at our present rate of expenditure, to something approaching £5,000,000,000. Furthermore, it would be an economy and would save the Government a considerable sum if adopted as an alternative to, or as performing part of the function of, price control.

I agree entirely with the right reverend Prelate that this is neither the time nor the occasion for discussion of a detailed scheme of family endowments as drawn up by its protagonists. That is best left until the principle itself has been generally accepted. I am inclined to think that there is not as yet sufficient agreement on principle for the Government to be able to introduce legislation of this kind forthwith. I have no doubt that is what we shall be told by the noble Lord who replies. But there is an alternative, and this is what I propose. I should like to see a Committee of Inquiry appointed immediately on which all the political Parties will be represented, and whose terms of reference will include the examination of schemes of family allowances among other methods of alleviating hardship caused by the war. I hope that the noble Lord opposite will be good enough to mention that suggestion to his colleagues in the Government. It seems to me a practical step that would be supported by public opinion and certainly by all those who are gravely concerned about this problem.

LORD ELTON

My Lords, may I be allowed to submit one or two brief and more or less cautionary reflections on this very difficult problem of family allowances? The right reverend Prelate, as might have been expected, added very much to the cogency of his plea by the moderation with which he advanced it. There have been much more enthusiastic, much more over-optimistic advocates of family allowances. Indeed, during one brief passage of his most illuminating speech, I almost thought that the noble Viscount opposite had joined their ranks. There certainly have been many public: advocates of family allowances who have explicitly maintained that these allowances might be expected to send the birth-rate rocketing upwards. I have never myself been able to see any reason for supposing that family allowances would have any effect of that nature whatever. Except at the very lowest wage levels, where the birth-rate is already relatively high, nothing, even the most munificent allowances from the most lavish of public purses, would be likely to have any direct effect on the birth-rate. Indeed that has been the experience in France, where they have had some sort of family allowances since 1918, and where family allowances were openly advocated because they were likely to sustain the dangerously falling birth-rate.

After more than twenty years of experience there is no satisfactory evidence, I understand, that family allowances in France have, in fact, favourably affected the birth-rate. Indeed the noble Viscount himself quoted that tragic broadcast by Marshal Pétain of which we were all hearing a week or two back: "Not only too few guns but"—in spite of family allowances—"too few babies." I do not myself think that that is an argument against family allowances, because I cannot help suspecting that if family allowances did, in fact, send up the birthrate the effect on the whole would be dysgenic. Any rise in the birth-rate occasioned by any family allowances on a scale remotely resembling what the right reverend Prelate has in mind would presumably occur at the very lowest wage levels, among unskilled workers, from whom, on strictly eugenic grounds, we do not wish primarily to breed. It would almost certainly have no effect on the skilled artisan class. It would have no effect whatever on that always neglected, forgotten, and over-burdened middle class which in the past has given us our leaders in art, literature, science, and war, and which is now in so rapid a decline.

I think, therefore, the case for family allowances must rest primarily, as the right reverend Prelate did in fact rest it, on the expectation that it would lift the families of the lowest-paid workers over the poverty level. That is an admirable objective in itself, fully worth working for and attaining, but before your Lordships commit yourselves to it you should take a brief survey of the economic background against which that object is to be pursued. Surely the most prominent feature in that economic background is a vast, unco-ordinated, and undirected rise in wages. Now that again in itself would not matter nor would it necessarily have any particular relation to the question of family allowances were it not for the fact that, as far as I am aware, the Government are still quite destitute of any wage policy whatever. Nothing could be more admirable in my judgment than a policy which should accept the principle of family allowances for lower-paid working families as part of a clearly cut and publicly announced wage policy for the nation as a whole. But it will not be outside your Lordships' recollection that only about a fortnight ago the noble Lord, Lord Balfour of Burleigh, introduced a Motion with regard to inflation, and every speaker in that debate pressed strongly for a Government statement as to their wage policy. The noble Viscount on the Woolsack, who was replying, said at the outset of his speech that he proposed to deal frankly with all the questions raised by speakers who had taken part, but in fact I think I am not doing him an injustice if I say that he uttered no word whatever in reply to that strongly phrased inquiry from each of the speakers in the debate: Have the Government a wage policy?

When in industry after industry dining wage negotiations it is explicitly stated that the workers claim a rise in wages to keep pace with, if not to outpace, the rise in prices, partly occasioned by taxes, do the Government accept and approve and wish to carry further that principle or do they not? It may be that there has been some official utterance on that very pressing and very fundamental question, and that I have merely been remiss in not making myself acquainted with it. I can only say that during that debate at least an answer was pressed for and none was given, and until there is some clear-cut Government policy for wages as a whole I must admit that, to me, at least, it seems next door to impossible to inject into this incoherent mass of unco-ordinated and unregulated rises of wages a further purchasing power, however admirable may be the object of the operation in itself. I therefore very much hope that the Government will accept the principle of family allowances, but make it clear that they are only accepting it as part of a clear-cut wage policy which they will openly announce, if possible in the course of this present debate.

LORD STAMP

My Lords, it had not been my intention to speak when I came to hear this debate, but in the course of it I feel constrained to make a remark or two, introducing a distinction which follows from the course of the speeches that have been made. I have been publicly in favour of the principle of family allowances for many years, and I can endorse what has been said about the way in which they have benefited the persons receiving them when they have been tried on a small scale. The great Methodist Church has been familiar with this system for its ministers for generations, and I think the London School of Economics, when it had a certain amount of money and wanted to benefit the staff, did so in this form by making children allowances. I do not mean to say anything on general principles, but only upon the particular aspect which we are considering.

I can well understand a very forceful reply from the Government that this is not the time, with the enormous Budgetary expenditure that we now have, to introduce this very considerable additional liability for a further Social Service. I can also understand that it is not quite a fair thing perhaps, under cover of the emergency of war-time, to slip in, as it were, to begin something that cannot be gone back upon, a new sort of scheme about which there is great difference of opinion. But however strong those replies may be we are faced with a radical difference between any other time that we have known and the present time. The fact is that the present supply of commodities is strictly limited. That means that, whatever wage increases may be given, they have no effect whatever in increasing the supply of commodities. All they do is to redistribute the commodities among the working classes, most going to the section that has received the most recent wage increase. If wage increases can only do that, can only redistribute commodities, it is most important that the redistribution, if it is to take place, should take place along the lines most suited to social conditions and needs.

Therefore my feeling is that if and when the Government make a pronouncement of wage policy—and if inflation is to be avoided on a big scale, that declaration cannot surely be long delayed—the Government might, at least, commend to industry this principle, so that, if any wage increases are granted on the familiar plea based on the cost of living, they should be granted only on such a basis as would apply to the minimum level of subsistence applicable to all wage earners, and that that minimum should be measured by reference to an average family, roughly, say, of two children, but that on top of that, as the right reverend Prelate has suggested, there should be recognition of the needs of the additional children. Then, having regard to this psychological phenomenon of imagining that an increase of wages must be a good thing, though as a fact it cannot buy any more, we should prevent the increases given being; positively anti-social and put them into the household budgets of those with the greatest needs. Could not a lead be given to industry that any increases that were granted under the present method of arbitration should be given on this principle of family allowances? If that were done I am sure it would be a very fundamental advantage in keeping down the cost of living and avoiding the worst evils of inflation.

It still is to some extent an illusion, but if we have to have it, and apparently our psychology is such that we must, let us at any rate direct it into channels that are least harmful. But there is a rider to this. It may not always be found possible to do this through the medium of separate industries mixed up as they are now so largely with Government contracts, and with every device which alters the general incidence of wage payments, and it may be necessary to have a measure of social assistance through the central Budget. What better than to make this supplement on the basis of the family as nearly as possible in kind and to have something exchangeable for the particular wage increase given for the extra children to be spent on certain commodities which are most necessary to the life of those children, so that in this curious scramble that is going on for the redistribution of a very limited amount of commodities you would have a direct claim upon those commodities for the very children whose welfare you have at heart and whom you are most concerned to benefit?

My only contribution to this debate is not to press for the immediate application of the principle. I would indeed like to see the inquiry that has been suggested in the limited field of wage increases at the present time. If the principle be admitted as a piece of Government policy and advice to industry, even if it cannot be made in any sense compulsory, I am sure a strong lead along these lines, with the country ready to accept such lead, would be most acceptable.

THE SECRETARY OF STATE FOR THE COLONIES (LORD MOYNE)

My Lords, the right reverend Prelate who opened this debate has brought this very important matter to the attention of your Lordships on several previous occasions. In 1938 he made a very forcible plea when we were living under peace conditions and now, with the dislocation due to the developments of our war economy, the necessity of dealing with the living standard of the very poor and of protecting the large families with dependent children from the full burden of the increased cost of living has assumed a new importance. The difficulty in connection with wages is that wages are distributed to the individual as a unit, whereas the consumption which they enable is based on a family unit. The general level of wages is, I believe, a fair approximation to the subsistence necessities of an average family, and once you get that basis of an average it is quite evident that the present system gives an advantage to the unmarried man or the small family. This system may be extremely harsh upon large consuming units. I agree with the noble Earl, Lord Listowel, that a general rise in wages would not really solve the question. It would merely alter the level at which the pinch would be felt. The report of the Unemployment Insurance Statutory Committee showed a year or two ago that, when you base the weekly payment on a subsistence level, by comparison the wage level which has been earned by these large families has been dangerously depressed below the absolute necessities of life.

It is obvious that where incomes are insufficient for primary needs the children are the worst sufferers. Family allowances are only one method of dealing with this extremely intricate problem. The noble Lord, Lord Stamp, showed us some of the fallacies into which we are apt to be drawn by thinking that a rise in the rate of wages is going to be the solution, and he suggested that the only satisfactory way of securing that the advantage should go to the young children is that there should be some system of a wage increase being partly paid in kind. I was impressed by the imposing array of authorities in political circles and in economic circles which were mentioned as supporting this proposal of family allowances, but we have to bear in mind that organised labour has so far supported an alternative proposal, although for the last ten years, as the noble Earl told us, they have not published any definite recommendation on the subject. I think all noble Lords will agree that a change of this kind, with anyhow the risk of a considerable effect on the present wage structure, could not possibly be adopted without the support of organised labour.

There is no doubt that it is an effective method if its results can be limited in other directions. The noble Viscount told us the benefit which was found in applying this principle to police pay. It has also, as I think he told us, been applied to soldiers and sailors, to national health insurance, I think to workmen's compensation, and of course to Income Tax. But in the case of these weekly allowances it is quite evident that if you had not applied that system you would have been bound to have a higher average payment, and that no doubt is the con- sideration which lurks in the minds of a good many people who speak for the wage-earners and who are not at present satisfied that any work able scheme has been produced. At first sight it is very surprising that the trade union demand has not concentrated on some system to help these small incomes which limit consumption in large families. The opinion in trade union circles cannot be static on this matter. I feel sure that with present conditions there must be a great deal of ferment at work, and I am sure it is invaluable that we should have such debates as this and that attention should be applied to all the different aspects of this question.

I was rather surprised to hear the noble Viscount, with his great knowledge of the coal industry, express the opinion that the pool system, or throwing the burden on the industry concerned of these family allowances, was more popular with the coal miners than with other trade union organisations. Only in June, 1938. the Member in another place for the Llanelly Division, an ex-President of the South Wales Miners' Federation, asked the Prime Minister to bear in mind that a considerable and deep-seated hostility amongst trade unions existed to any system of family allowances borne by industries and asked the Government to use their influence to raise wage standards.

VISCOUNT SAMUEL

May I be allowed to interrupt for a moment? I was not referring to the question whether the cost should be borne by the State or by industry, but to the question whether any form of family allowances was acceptable. My authority for the statement, if my memory does not mislead me—I have not looked it up recently—was that when the matter was discussed in one of the committees of the Labour Party the miners were the one section that declared a more or less favourable view of the principle as against the majority who were on the other side.

LORD MOYNE

I am very glad the noble Viscount has cleared up that point, but I think we must bear in mind that there is a strong hostility on the part of trade unions to throwing the burden upon industry, as I think has been done almost universally in the foreign systems to which the right reverend Prelate referred. There is, of course, besides this suspicion of the system of throwing the cost on industry, considerable doubt as to the wisdom of any system of family allowances as being likely to force down general wage rates. It is often thought that any cash payments for children, or for any other special claims, would discourage general wage increases, and the Trades Union Congress have probably had in mind their responsibility to employ their activities to improve conditions of the workers as a whole and not the wages of a particular section. I feel sure that a great many of those responsible for the movement feel, quite honestly, that a change which removed a grievance from a particular section might take a bargaining weapon from the labour side and transfer it to the employers' side.

Of course, the alternative method to the contributory scheme, whereby the State would bear the burden, is a very costly responsibility for any Chancellor of the. Exchequer to assume. The noble Earl mentioned a very modest figure of, I think, £15,000,000 as the amount which would be necessary, but it is quite certain that if we started off with a limitation to families of more than three children you would never be able to hold that; you would be bound to carry your differential relief further towards its logical conclusion. The figure of £15,000,000 would, I think, be very misleading to us and we ought to keep in mind the figure given by the noble Viscount, Lord Snowden, when he was Chancellor of the Exchequer, which was, I think, £107,000,000.

THE EARL OF LISTOWEL

May I beg your Lordships' leave to say that the figure I actually mentioned as the estimated net cost was £10,000,000 and not £15,000,000?

LORD MOYNE

I beg your pardon. But I think that figure is even more dangerous for the House to keep in mind, for I think it is certain that once the principle was conceded it would be quite impossible to limit it to the more extreme cases, and there would be an irresistible case for carrying it to the full and logical conclusion of providing for all cases on a sort of basic rate which would, no doubt, be laid down. At the present time, with the tremendous burden which we are carrying, and which I feel must be increased in the near future, it would be out of the question for the Chancellor of the Exchequer to assume this burden, and indeed it is fair to say that no one sug- gested that any scheme of family allowances could be instituted at the present time.

It is, perhaps, worth while reminding the House of just what happened when the Trades Union Congress discussed this matter, beginning about fifteen years ago. It was first examined by a Joint Committee of the Trades Union Congress and the Labour Party and after an original failure to agree and a reference back, the Trades Union Congress, in 1930, finally adopted the Report of their General Council recommending that before any decision on family allowances was taken a group of Social Services for the benefit of children should be provided out of public funds. They laid down in detail the services which they wished to see. First a complete medical service for all children from birth to school-leaving age, then pre-natal and post-natal maternity services together with a cash payment for each child for the first year or two years after birth, the raising of the school-leaving age with adequate allowances during the difficult years, the provision of nursery schools for children up to the age of admission to elementary schools, the provision of adequate healthy houses, the elimination of tuberculosis, and the provision of pure milk.

On many of these matters very great advances have taken place. Some of them have been suspended owing to the war; the improvement of housing for instance, the provision of better accommodation for large families—which would be a great alleviation—the raising of the school-leaving age; but leaving these matters aside very great improvements have been achieved during the war period and they have been specially directed at the rise in the cost of living. I think there was a good deal to be said for the view that we ought to begin by these methods of direct assistance, because the services which were asked for by the Trades Union Congress cannot fail to go to the benefit of the children, but the effect of money payments may, in many cases, be much less concentrated upon the children's interests. We all appreciate that the rise in money wages has in many cases been offset by a reduction in real wages owing to taxation and rising prices. The Government policy has been to try to get a differential stabilisation of real wages at the lowest level.

The noble Earl very naturally anticipated that I should mention the matter of the £100,000,000 a year now being spent in keeping down prices of essential foodstuffs—bread, flour, milk, meat, tea and oatmeal. It is true that this benefits all classes, but I do not agree with the view that it benefits them all equally. I think there is no doubt that the very poor spend a larger proportion of their incomes on these necessities than do people with a higher income level. The Government have also helped to keep down the cost of living to these large families by leaving out from the Purchase Tax the necessities of life. Side by side with these subsidies to keep down prices, there has been the milk scheme for expectant and nursing mothers and children up to five years old, Which is now costing £13,000,000 a year already, after a few months, and benefiting 2,700,000 individuals. That is quite apart from the scheme of milk for schools, and it has had a most extraordinary result on the consumption of milk, because one-fifth of the milk drunk in this country to-day is now going through the channel of this milk scheme. The noble Earl asked about communal feeding in schools. It was news to me that there had been any setback to that. I understood that the Minister of Food was very pleased with the result of his efforts to increase communal feeding generally, and I think that any of us who live in the country and have seen the problem of evacuees must realise that a great deal has been done in the schools to take advantage of this system.

The noble Earl said that he wished to emphasize the conditions which were primarily due to war. It seems to me that war conditions are really not suitable as a basis for a permanent settlement of this very difficult problem of the subsistence needs of the small wage earner. In wartime it is necessary to have methods of quick and flexible correction for rapidly changing needs. The whole situation with regard to wages, and especially as to how the very poor are affected, is under constant and daily review in order to apply appropriate remedies and to ensure meeting the essential needs of the poorest members of the community. Again I do not want to misrepresent the noble Lords, and I agree that they have not suggested that we should take the present expedients as a basis, but the fact that these expedients are in force does distort the present situation, and I think that it is a matter which must be considered in the light of the whole plan of post-war reconstruction.

I discussed this matter with the Chancellor of the Exchequer and with the Minister without Portfolio, Mr. Greenwood, who is specially charged with this long-term planning for the time when the present crisis is over, and I can assure your Lordships that I found in neither of them any kind of hostility to the idea of family allowances as part of a postwar reconstruction, if a generally acceptable scheme can be worked out; but the Chancellor of the Exchequer made it quite clear that he cannot possibly afford the present system of subsidising the necessities of life, and a kind of differential stabilisation, and at the same time provide a very large sum for family allowances. We can have one or the other, but we cannot possibly have both.

I would say, in answer to the suggestion that we should have a great public inquiry, that it is probably not a very good time in this emergency to raise the controversy which would be inevitable if this question were tackled. I was rather interested to hear the right reverend Prelate describe public inquiries and Royal Commissions as "jam." I have sat on a good many of them, and I rather sympathise with the view that very often they are a means of shelving questions and that they are not altogether the most expeditious method of obtaining a settlement. I think that such a debate as we have had to-day is a very useful way of focusing opinion. I will see that it is brought specially to the notice of the Chancellor of the Exchequer and of Mr. Greenwood, and more particularly the latter, who, as I have already mentioned, is charged with the planning of our postwar system and who necessarily in that connection is giving anxious consideration to this very important question.

THE LORD BISHOP OF WINCHESTER

My Lords, I am very grateful to the noble Lord for the most careful reply which he has given. I am naturally disappointed by parts of it, but I am encouraged by the statement which he has made that this matter will be most carefully considered by those who are responsible for the post-war plan, and I am very grateful to him for saying that he will see that this matter is brought to the most careful attention of Mr. Greenwood, who has a special responsibility in this connection. I wish that it had been possible to appoint some small committee to go into this question, because I think that there are greater chances of agreement between the trade unions and others concerned in this matter than there were in the past; but of course I fully agree that it would be impossible to bring forward a highly controversial matter, and that action in the kind of direction which I have advocated would be impossible at this time unless behind it there was general agreement.

There is only one other comment which I would make. It is quite true that an immense advance has been made in all our Social Services, and it is wonderful to see what has been done and is being done at the present time; but, when we take into account everything that has been done the fact still remains that something like 25 per cent. of the children of the country are living in conditions of what is described as primary poverty. Once again I thank the noble Lord for his answer and I ask leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.